I am a long term buy and hold investor who focuses on dividend growth stocks

Friday, September 26, 2014

Chevron (CVX) Dividend Stock Analysis 2014

Chevron Corporation (CVX), through its subsidiaries, is engaged in
petroleum, chemicals, mining, power generation, and energy operations
worldwide. The company operates in two segments, Upstream and Downstream. Thisdividend champion has paid a
dividend since 1912 and increased it for 27 years in a row.

The company has managed to deliver a 12%
average increase in annual EPS over the past decade. Chevron is expected to
earn $10.81 per share in 2014 and $11.37 per share in 2015. In comparison, the
company earned $11.09/share in 2013.

The annualdividendpayment has increased by 10.50% per
year over the past decade, which is lower than the growth in EPS. Future growth
in dividends will likely match rate of increase in earnings per share.

Currently, Chevronis attractively valuedat 11.80 times forward earnings, and
has a dividend yield of 3.30%. Overall, I believe that oil companies like
Chevron have the quality of assets that generate strong cash flows, and quality
of a management team, coupled with a dedication to sharing the wealth with
shareholders through a commitment to dividend growth and share buybacks. While
dividend growth rates might fluctuate from year to year, I am firmly believing
that the investor with a 20 year horizon, who patiently accumulates and
reinvests dividends, will reap the rewards in the future.

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